Thus Spake Mungo: Shorten hedging his bets on Adani

By Mungo MacCallum

Bill Shorten has finally taken a firm position on the Adani coal mine: procrastination.

The opposition leader tells us that when (not if – there can surely be no doubt of it) Labor becomes government, he will make a decision. And as is almost always the case with our alternative prime minister, it is not clear just what that means.

Shorten has virtuously ruled out tearing up contracts, which removes at least part of the sovereign risk involved the venture. Instead he has apparently discussed ways of means of finding further loopholes in the Environment and Biodiversity Conservation Act, which may be somewhat more difficult.

Over the years Adani has negotiated its way through a myriad of objections by various activist groups, most recently the Wilderness Society, and the company has eventually won, achieving both the federal and state permissions needed. The idea that there can still be more wiggle room may be wishful thinking. But the mere fact that Shorten has been talking about it – even if semi-privately – will give Gautam Adani and his fellow moguls something else to worry about, and of course that was the real point of the exercise.

The revelation came from the philanthropic greenie Geoff Cousins, a long time opponent of Adani who took Shorten on a working trip (not, in spite of Malcolm Turnbull’s attempted put down, a junket) to the Great Barrier Reef and beyond in an attempt to get the ultra-cautious politician off the fence; to make him say, in the manner of Bob Hawke with the Franklin dam, that he would do everything in his power to scuttle Adani, and he would make it an issue in the next election.

Shorten, no Bob Hawke, has not and will not do so – at least not without overwhelming support in the polls, or at least enough of it to blunt any backlash from regional Queensland. So he continues the line that Adani is dubious but mining is fine.

The implication seems to be that if he can just get Adani off the table, the rest of the Galilee Basin can be exploited without hindrance. This, of course, would be deeply unsatisfactory to the green movement, which wants, at a minimum, a guarantee of no new coal mines and ultimately the demise of those which are already operating. Obviously this will not happen in the foreseeable future, so for the moment the attention is on Adani, and there are some signs that the conglomerate is starting to weigh up whether to cut its already considerable losses.

The company’s normal business model is to work through compliant governments to extract concessions, subsidies and whatever perks are available in order to rape and pillage the local economy – to demand feather bedding to the point of corruption. It has had great success in its native India, but its tentacles have spread among many vulnerable economies across the world. Thus when it cast its beady and greedy eyes on Australia, it assumed that the pattern would be the same.

And at first it appeared that all was going to plan. The feds were enthusiastic: there was a promise (well, at least a wink and nudge) that a lazy billion dollars could be found for a very cheap and probably never to be repaid loan to finance a railway from the mine to Abbott Point before shipping the coal across the reef and wherever it could find customers.

The Queensland government instantly offered a long financial holiday so no actual royalties had to be paid. The fantasy of an El Dorado in an economically deprived area was promulgated: someone pulled the figure of 10,000 new jobs out of a hat, a number which has been tirelessly repeated in spite the fact (admitted by Adani itself) that the reality would be little more than a tenth of the propaganda. The public had visions of the new, endless reprise of the resources boom for the lucky country. It was all go.

But then things started to turn sour. The demand for coal, and especially for dirty thermal coal, was not endless: if it had to stand on its own merits (which Adani had no intention of doing – why break the habit of a lifetime) the mine might not be quite the bonanza the spin masters were spruiking. Local banks, encouraged by a forceful and effective campaign from environmentalists, decided that perhaps there were wiser and less controversial investments for their funds.

Then, unexpectedly, the Queensland government kyboshed the Infrastructure Fund’s billion-dollar loan to the railway. Given that Adani had previously maintained that it didn’t really need the money anyway, this should not have been a deal-breaker, and in itself it wasn’t; but it was another stumbling block on what was meant to be an untroubled way to an offshore tax haven.

And the anti-Adani movement was ramping up; the company had already  deferred its starting date seven separate times, with the prospect of more to come. So there is little doubt that if Shorten was prepared to announce that Labor was off the cart, it would be a serious blow. Cousins certainly thought so, which is why he was putting the screws on Shorten to take the plunge: he has said that if this happened, the project would be killed stone dead.

The theory was that Shorten would not have to explain how or when he would act in government: the mere fact of a well-publicised withdrawal of any support for Adani would be sufficient, and the theory may well be right. Shorten is not yet ready to test it; however, sooner rather than later he may have no choice. Turnbull and his troops have apparently convinced the public that the opposition leader is two faced, prepared to say whatever suits his audience, is devious and untrustworthy and must therefore be rejected by the voters. Shorten can probably wear the opprobrium, as long as his polling holds up, but the hard heads in the ALP backrooms may be less sanguine.

There is an old schoolyard joke which goes thus: Question: How do you keep an idiot in suspense? Answer: I’ll tell you next week. The voters will not be taken for idiots forever. Procrastination may be a tactic but it is not a long term strategy, much less a policy. One way or another, Shorten has to decide.